Of all the specialised arms of the financial service sector of the economy, insurance is about the least understood but ironically, one that offers the greatest and most enduring benefits. Issues and challenges that many Nigerians have with insurance business date back to the era when insurance companies and their agents subject their customers (including prospective policyholders) to filling tortuous policy forms/ documents. However, with emerging technologies, signing up an insurance contract is becoming more easier and better.
Only recently, many Nigerians explained why they do not value insurance policy. Their reasons were logical, but to policy analysts in the sector, no reason could justified why people should ignore insurance.
While some persons said lack of trust and confidence on the side of insurer was a demotivating factor, others see the herculean task involved in the process of receiving claims/compensation and insurer’s inability to do the needful as and when due as the major reasons for their abrupt disregard for Insurance.
Similarly, there are those who believe in the Almightiness of God to protect them from all evil, thus, the need to pick Insurance policy was never considered.
Since insurance is something many business owners do not want to think about, the bottom line is, in life, losses are inevitable, and the degree to which these losses impact our lives varies. Several benefits could be ascribed to modern Insurance practice in Nigeria.
Mr. Festus Alikwe, an insurance consultant espoused the benefits of insurance saying, “A typical Nigerian do not believe that calamity would strike until it does, but whether people believe it or not, the possibilities seem endless. However, Insurance lessens the impact of any loss by providing financial support when calamity strikes.
“Taking up Insurance policy is an act of preparing for the unexpected- particularly now that the world has become volatile given a fusion of natural phenomenon and human activities. In some climes people are required by law to have insurance not only for your sake but in order to protect others,”
Alikwe admonished citizens to pick insurance to protect them against theft, damage from perils like fire and water, and financial responsibility that could result from the insured being accidentally injured on one’s property.
According to him, “Insurance prevents ones from immediate pains resulting from a loss. When you buy insurance, you transfer the cost of a potential loss to the insurance company in exchange for a fee, known as premium.
He stressed that Insurance helps one to stand firm especially when the chips are down. For instance, mortgage lenders need to know your home is protected. Thus, it covers you for repairs and replacement of any damage that’s covered in your policy. “It helps one to maintain one’s current standard of living if one become disabled or have a critical illness.
“It provide for your family in the event of a death. There are life insurance / assurance options for short and long-term needs that protect your family’s home, mortgage, lifestyle and the cost of post-secondary education for children.”
He revealed that insurance in no small measure helps one to run a small business by managing the risks of ownership. He noted that one can also take vacations without worrying about flight cancellations or emergency medical expenses abroad, because one has insurance coverage.
Since it’s very essential to insure, he maintained that one need to take precautions while engaging insurance company. For instance, many insurance policyholders have complained bitterly that they were deceived by insurance companies, the reason been that, they (policyholders) were unable to understand fully the technicalities as well as terms and condition (always printed in a very tiny fonts) attached. Thus, one need to take the time to review policies offered and contact a helpful financial advisor or brokers to get some questions answered.
“A little knowledge can make a big difference when it comes to buying the right insurance to help protect what matters most for you and your family. So one need to be meticulous from the beginning.
“Aside the central role in one’s financial wellbeing, it provides financial security for one and family especially during emergencies and exigencies. You insure your car, your home and others. But nothing is more important than your life and your ability to make a living. So it makes good sense to insure your greatest asset – you!”
He added that as one advance in life, the need for insurance becomes inevitable. Hence it helps provides financial safety net that helps you to take care of oneself and other loved ones as need rises.
“No matter what your financial position is today, an unexpected event can see it all unravel very quickly. Insurance offers a payout so that if there is an unforeseen event you and your family can hopefully continue to move forward.”
“For young couple who just started a family journey, picking insurance policy is very imperative to protect every persons (including your children) who matter most in your life from financial hardship if the unexpected happens.
“Insurance helps to reduce stress during difficult times. None of us know what lies around the corner, no matter how spiritual one may be. Unforeseen tragedies such as illness, injury or permanent disability, even death – can leave you and your family facing tremendous emotional stress, and even grief. With insurance in place, you or your family’s financial stress will be reduced, and you can focus on recovery and rebuilding your lives,” he added.
Similarly, a lawyer, Abiodun Olowu, revealed that having an insurance policy somewhat guarantees peace of mind. He noted that no amount of money can replace one’s health and wellbeing – or the role it plays. But one can at least have peace of mind knowing that if anything happened to him, his family’s financial security is assisted by the insurance company. In most cases, a lump sum death benefit can secure the financial future for one’s children and protect their standard of living.
According to him, insurance also facilitates commerce. For instance, multinational companies like Dangote Group, would never do without insurance cover, else should anything happen to his consignments in the air or high seas, the national economy is affected since he is a major distributor of many household commodities. More so, his employees would be affected either by Job loss or pay cut, invariably – the macro economy suffers because many are thrown into the unemployment net.
“To get the money your business needs, it’s advised you enjoy the benefits of insurance. Without insurance, your winning business model can’t get the funding it needs to take its first step, or your established business model can’t get the funding to evolve and better compete.
“Some categories of Insurance are compulsory in some climes. To tell you how important it’s, some government made it a law/compulsory, Auto insurance is a good example. “Insurance is a safety net when risks go wrong. Should a key member or piece of equipment go out of commission, the business can carry on. It all goes back to the idea that insurance, when activated, makes policyholders whole again.